Karnataka today became the first State in the country to launch an e-payment system for commercial tax payers.

Speaking at the launch, Reserve Bank of India Deputy Governor Shyamala Gopinath wanted such a system to be adopted by other States.

The system enables dealers to remit their commercial taxes anytime, anywhere, without physically approaching an office of the Commercial Taxes Department (CTD).

Right now, e-remittances can be made from six banks - SBI, SBM, SBH, Syndicate Bank, Canara Bank and Union Bank of India.

Chief Minister B S Yeddyurappa said more public sector banks would be added to the list going forward. He said the system would also help curb tax evasion.

Mr. Gopinath launched the reconciliation portal of the CTD.

Commercial Taxes Department officials said the new model was a “comprehensive e-payment reconciliation system” that would “run seamlessly from the dealer up to the government treasury”.

The CTD collects more than Rs 2,000 crore per month and till now, these collections were by way of cheques by the dealers.

Every month on average, more than one lakh cheques were received by various offices of the CTD and these are then sent to the agency bank, which in turn processed them and remitted to the government account.

This involved a huge amount of manual work and at the same time, delay in realisations of amount and some cases of bounced cheques also. The reconciliation process was very difficult. Also, dealers were inconvenienced as they had to come to the respective offices and wait in a long queue to remit the tax.